The harsh reality: “me too” loyalty is not sustainable

We recently partnered with Wylei Research to better understand the ways consumers feel about brand loyalty and the drivers behind those feelings. While the study revealed some interesting findings (stay tuned for the full report), one in particular caught me off guard. The research revealed that loyalty reward programs do not drive loyalty. That’s a bold statement, but if you think about it in the context of the current economy and marketing landscape, it makes perfect sense. Today out-of-the-box loyalty programs can no longer survive. Implementing a “me too” and standard “best practices” approach results in minimal marketplace differentiation. Whether your effort is implicit or explicit, traditional design or based on game mechanics, you must have a clear understanding of what you want to achieve, what your brand represents, and who your ideal customer is. Then, use ‘best processes’ to define the best strategy for your brand. The recession has had a dramatic impact on the attitudes of consumers. The result is a transformation loyalty marketers need to understand to survive. With the data deluge, the shift from .com to .me and the epidemic of ‘time starvation’ your messages and offers must be relevant, in the context of a consumer mission and must add value for the consumer or they will be ignored. Successful modern day loyalty marketing must be built on six pillars:

  1. Identify. First, identify who you are. Social media growth demonstrates people want to connect. Connection is core to human existence. Most of us want to connect in a meaningful way with someone or something. Your brand ‘personality’ is critical. Turn that personality into a value proposition economically, emotionally or with a blend of the two, and provide consumers a clear reason to connect with your brand.
  2. Connect. Understand consumers interact with brands in many different ways. While email remains the dominant communications medium, consumers connect over a multitude of channels. Therefore, your brand must provide the method(s) of connection your consumers prefer, while connecting offline data to online data to be most effective and to get the whole consumer picture.
  3. Define. Segment customer groups using the data you’ve collected and use third-party data to increase the understanding you have of the consumer. Behavioral data, or how consumers interact with your brand, yields a very narrow view. Enhancing that view with third-party data delivers a richer profile that is much more actionable. Apply the data to find new ways to serve, engage and drive the relationships of value for your brand. A word of caution here: use it wisely. Privacy and trust are key drivers of today’s relationships.
  4. Engage. Do not be afraid to experiment, test and learn. Consumers are more tolerant of mistakes, especially when a brand responds in-kind and apologizes when mishaps occur. It is the effort and the attempt to serve that is important. Be relevant, be focused and seek mutual value.
  5. Respond. Always be listening and be ready to respond. Develop strategies where an engagement will provide the opportunity to respond. For example, our email benchmarks have repeatedly proven that triggered confirmation emails receive 100% higher open and click through rates.
  6. Acknowledge. Most importantly, say thank you. A simple thank you goes a long way. Gratitude and conscious acknowledgement of your consumers keeps communication open and the relationship healthy.

Based on the fact that loyalty reward programs do not drive loyalty, will you have to change your loyalty strategy? Comment below. Learn more about how we can help you with loyalty marketing or contact us.